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Koruna Treads Water, CNB Decision Eyed Next Week

CZK

EUR/CZK is rangebound amid the absence of major domestic catalysts. The rate last deals at 24.656, little changed on the day, with bulls looking for a clearance of Jul 7, 2022 high of 24.797. Conversely, bears see the 24.3 area as their initial target.

  • CZGB yield curve has bull steepened today. Moneta CEO Tomas Spurny said that "there has never been a better time" to buy CZGBs as inflation is easing and the government is implementing fiscal consolidation measures. Spurny expects monetary easing to start early next year, which should increase the attractiveness of government bonds.
  • The Czech National Bank will announce its next monetary policy decision on Wednesday (November 2). It is a close call between a pause and a 25bp cut. The decision will be informed by an updated macroeconomic forecast.

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